Mr Smith takes over from Graeme Liebelt at the end of next month. At the top of the agenda for his first week in the job is a meeting with Mr O’Farrell.

The Premier threatened on January 3 to shut down Orica’s ammonium nitrate plant at Kooragang Island, near Newcastle, in the event of another chemical leak. He has said he has little faith in the company.

Mr Smith said yesterday: “What I’m going to be doing that week is [go] straight to New­castle and I’m going to try to set up a meeting with the ­Premier. I think I need to speak to him and his environment minister as soon as I start."

Orica had to stop ammonia production at Kooragang Island in August after hexavalent chromium, a chemical known to cause cancer, was found to have leaked from the plant and into the suburb of Stockton. The entire facility was shut down in November when 900 kilograms of ammonia leaked into the atmosphere, affecting workers at a rail yard.

By mid-December the NSW Environment Protection Authority gave permission for production of ammonia and ammonium nitrate to resume.

On Tuesday Orica admitted it had breached its mercury emissions limit at Port Botany. Environment Minister
Robyn Parker
said: “The EPA is investigating this latest incident and I want some early answers as to how it happened. It is just not good enough."

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Orica revealed last month that the final cost of the Kooragang Island closure could be more than $50 million in lost earnings before interest and tax.

But most concerning for it is the effect on relations with the government, which has the power of veto over expansion of the Kooragang Island facility. Orica intends to lift ammonium nitrate production there from 430,000 tonnes a year to 750,000 tonnes by 2014 to meet soaring demand for explosives.

Environmentalists who gave evidence at a parliamentary inquiry into the August chemical spill believe Orica should shelve the expansion.

Pepe Clarke, CEO of the Nature Conservation Council of NSW, said: “It’s inappropriate to be considering expansion of production at the facility while known safety risks continue."